Dimensions and Determinants of Financialisation: Comparing OECD Countries since 1997

Article


Karwowski, E., Shabani, M. and Stockhammer, E. 2019. Dimensions and Determinants of Financialisation: Comparing OECD Countries since 1997. New Political Economy. 25 (6), pp. 957-977. https://doi.org/10.1080/13563467.2019.1664446
AuthorsKarwowski, E., Shabani, M. and Stockhammer, E.
Abstract

The financialisation literature has grown over the past decades. Despite a generally accepted definition, financialisation has been used to describe different phenomena. We distinguish between financialisation of non-financial companies, households and the financial sector and use activity and vulnerability measures. We identify seven financialisation hypotheses in the literature and empirically investigate them in a cross-country analysis for 17 OECD countries and two time periods, 1997–2007 as well as 2008–17. We find different financialisation measures are only weakly correlated, suggesting the existence of distinct financialisation processes. There is strong evidence that financialisation is linked to asset price inflation and correlated with a debt-driven demand regime. Financial deregulation encourages financialisation. There is limited evidence that market-based financial systems are more financialised. Foreign financial inflows do not seem a main driver. We do not find indication that an investment slowdown precedes financialisation. Our findings suggest financialisation should be understood as a variegated process, playing out differently across economic sectors and countries.

JournalNew Political Economy
Journal citation25 (6), pp. 957-977
ISSN1356-3467
Year2019
PublisherTaylor & Francis
Accepted author manuscript
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File Access Level
Anyone
Digital Object Identifier (DOI)https://doi.org/10.1080/13563467.2019.1664446
Publication dates
Online10 Oct 2019
Publication process dates
Accepted31 Aug 2019
Deposited15 Oct 2019
Copyright holder© 2019 Taylor & Francis
Copyright informationThis is an Accepted Manuscript of an article published by Taylor & Francis in New Political Economy on 10/10/2019, available online: http://www.tandfonline.com/10.1080/13563467.2019.1664446.
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